Ms. Beate Trankmann, UNDP Resident Representative in China, delivers a keynote speech at the 4th Annual IIGF Event in Beijing.

 

2020 Annual Meeting,

International Institute of Green Finance,

Central University of Finance and Economics

11 October, 2020, Beijing


史建平校长(shǐ jiàn píng xiào zhǎng)President SHI Jianping

马蔚华主席 (mǎ wèi huá zhǔ xí) Chairman MA Weihua

马骏博士 (mǎ jùn bó shì) Dr. MA Jun

王琳晶先生(wáng lín jīng xiān shēng)Mr. WANG Linjing

Distinguished guests, ladies, and gentlemen:  Good afternoon!

On behalf of the United Nations Development Programme in China, it is my pleasure to join this important and timely event on guiding finance towards a greener future.

At no point in our history has such a shift been more critical. Because COVID-19 has shown that ‘business as usual’ has failed us all. The global economy is in its worst crisis in almost a century. Societies are struggling to cope, with more than a million dead and millions more sick. And after decades of testing our earth’s limits, our environment is at a tipping point.

In 2015, the world committed to the Sustainable Development Goals– to end poverty, protect our planet, and leave no one behind. Yet, even before the pandemic, we were not on track to reach any of these ambitious goals by their 2030 deadline – and COVID-19 has put them further out of reach.

By the end of this year, up to 100 million people worldwide may be pushed back into extreme poverty. Human development is regressing for the first time since the 1990’s, due to the triple impact on health, education and livelihoods. Some 400 million people may lose their jobs, as economies have locked down and businesses have closed.

Without fundamental change, this trend is likely to continue. According to the June 2020 Global Economic Prospects,[1] businesses might find it harder to service debt, while higher risk aversion could raise borrowing costs. Bankruptcies and defaults could cause financial crises in multiple countries. And global growth could shrink by almost 8% in 2020, the deepest recession since the Big Depression[2] [3]

COVID-19 has exposed the urgent need for change – socially, environmentally and economically. It is squeezing the world in ways that force governments, development partners and businesses to rethink where finance comes from, and how to invest better for growth, stability and our future.

Before the pandemic, the annual financing gap to achieve the SDGs was estimated at US$ 5 -7 trillion. This was NOT due to a lack of capital or liquidity – in 2018, global GDP stood at US$ 86 trillion[4]. Rather, it relates to financial markets failing to effectively align with and prioritize sustainable development.

There are, in fact, enormous investment and business opportunities linked to the SDGs. It’s estimated that by 2030, SDG-generated growth could reach US$12 trillion. China alone could account for almost 20 percent. So investing in the SDGs isn’t only the right thing to do; it’s the smart thing to do – supporting jobs, growth and the planet, all at once.

In recent years, China has become a pioneer in policies to green its economy and financial system. Chinese regulators introduced rules that, by 2020, require all listed companies along with bond issuers, to disclose environmental, social and governance risks associated with their operations.

Recently, President Xi Jinping reaffirmed China’s commitment to the SDGs, aiming “to have CO2 emissions peak before 2030 and achieve carbon neutrality by 2060.”

It’s also encouraging to see that this year, finance authorities updated the China Green Industry Catalogue – excluding coal and natural gas, while including hydrogen, sustainable agriculture, green consumer finance, green services and manufacturing. Not only can this boost China’s green economy, it also reflects international standards.

So, how does UNDP enable green finance? Globally, UNDP works with countries in fulfilling their commitments to the Paris Climate Agreement. As one of the five institutional stakeholders of the UN Financing for Development Agenda, we are helping to shift public and private markets to unleash the finance needed for sustainable development.[5]

We work with governments on public finance to provide analytics, showing where to invest for maximum social and environmental dividends. For example, in the last two years, UNDP accompanied the governments of Mexico and Mongolia in aligning national budgets with the SDGs.

We also support countries in mobilising private finance for the SDGs and combating climate change, by designing financial sector strategies, regulating and incentivizing capital flows and blending public and private finance. In Indonesia and Mexico, we helped to develop frameworks, eligibility criteria and reporting mechanisms for green and SDG-aligned bonds.

Our teams across the world are also working on a common global framework, guiding companies and financial institutions to invest and operate sustainably: the SDG Impact Standards for Private Equity, SDG Bonds and Enterprises. This is expected to be tested in a number of countries, including China, where we hope to partner with international development banks in applying it. To further incentivize and inform SDG financing in China, UNDP – together with investors, regulators and banks – also recently developed its SDG Finance Taxonomy. This toolkit aims to help investors identify, finance and monitor investments in the SDGs, as well as measure their impact.

Only by working together – across governments, businesses and society – can we achieve the SDGs. That’s why UNDP is building a platform where all stakeholders can participate and guiding capital towards these goals in meaningful, measurable ways.

The pandemic has proven that a new normal is possible – and that our survival depends on embracing it. As we rebuild, this lesson becomes a window of opportunity - an opportunity for nations to shape their recovery and future economies in ways that are more resilient and green.

We hope our work can support you in designing and introducing far-reaching, long-term packages to promote the green recovery. And we welcome you as partners on this journey.

Finally, let me congratulate the International Institute of Green Finance (IIGF) for their promising results and thank Professor Wang Yao, Director General of IIGF, and her team, for their indispensable partnership with UNDP.

Thank you!

 

 

 

[1] “World Bank. 2020. Global Economic Prospects, June 2020. Washington, DC: World Bank. © World Bank. https://openknowledge.worldbank.org/handle/10986/33748  License: CC BY 3.0 IGO.” See also: https://www.worldbank.org/en/news/feature/2020/06/08/the-global-economic-outlook-during-the-covid-19-pandemic-a-changed-world

 

[2] The Global Economic Outlook During the COVID-19 Pandemic: A Changed World https://www.worldbank.org/en/news/feature/2020/06/08/the-global-economic-outlook-during-the-covid-19-pandemic-a-changed-world

 

[3] https://blogs.imf.org/2020/04/14/the-great-lockdown-worst-economic-downturn-since-the-great-depression/

 

[4] The $86 trillion world economy – in one chart https://www.weforum.org/agenda/2019/09/fifteen-countries-represent-three-quarters-total-gdp/

 

[5] UN Secretary General’s Strategy for Financing the 2030 Agenda for Sustainable Development

 

 

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